Tax deductions for NNN lease

[Jeffrey Fung]

Hi, 

First time dealing with a NNN lease. Since all maintenance, taxes, insurance, improvements is done by the tenant, what other types of deductions are available?

Thanks!

[Joel Owens]

Step 1. Make sure you have an absolute NNN lease. Do not assume it is so. Often what is put in for sale flyers is not correct or the owner doesn't even know what is in the lease.

Step 2. See if you qualify for real estate professional status as a broker/agent or putting in and logging hours per year in real estate activity (since NNN single tenant is mostly passive not going to qualify generally that way). Some people own other real estate that is active hours for investment to try and qualify.

Step 3. Analyze current income from job or business and see what deductions you might need in what years of today and in the future ( optimizing the tax planning and harvesting ). 

Step 4 . See what advanced cost segregation might yield in additional deductions against the properties NNN income. If not real estate professional typically you get capped on other income above about 125k annually that is not related for the NNN property.

This is a generalization and how you approach strategies varies by the individual. I have clients from 7 to 10 figure wealth that are individuals and families and what and how they make decisions varies each time. Might be some commonalities but still has many variations of difference.

Good luck. No legal advice given.